Iteration Energy Closes on Alberta Acreage

Iteration Energy, through a partnership, has closed the indirect acquisition of certain petroleum and natural gas properties and related assets located in the Manyberries area located in Southeast Alberta and the Peace River Arch area in Northwest Alberta.

The effective date of the Acquisition was June 1, 2007 and the closing date was September 27, 2007. The acquisition was funded by Iteration's existing credit facility (which has been increased to $95 million) and funds from operations.

Iteration also announces that it has filed its preliminary short form prospectus in all provinces of Canada in respect of the previously announced $25 million bought deal subscription receipt offering ("Offering") with a syndicate of underwriters led by FirstEnergy Capital Corp. and including Peters & Co. Limited and RBC Capital Markets (the "Underwriters").

Under the terms of Offering, Iteration will issue 5.21 million subscription receipts at $4.80 per subscription receipt. In addition, Iteration granted the Underwriters an over-allotment option to purchase up to an additional 781,500 subscription receipts which may be exercised up to 30 days after the closing. Insider participation by management, officers and directors of Iteration is limited to 15,000 subscription receipts. As the Acquisition has now closed, each subscription receipt will entitle the holder to receive one common share of Iteration, without the payment of any additional consideration, upon the closing of the Offering.

The net proceeds from the Offering, estimated to be approximately $23,459,400 ($27,023,040 in the event the Underwriters' over-allotment option is exercised in full), will be used by Iteration to reduce its indebtedness under its credit facility.

The Offering is subject to certain conditions including required regulatory approvals. The subscription receipts have not been and will not be registered under the United States Securities Act of 1933 or any state securities law, and may not be offered or sold in the United States or to U.S. persons unless an exemption from registration is available. The closing of the Offering is expected to occur on or about October 17, 2007.

Iteration is an Alberta based corporation engaged in the business of exploring for and developing oil and natural gas reserves in Western Canada and acquiring natural resource properties. Iteration's common shares are listed on the Toronto Stock Exchange under the symbol "ITX".